How to use annualized income and actual tax withholding for M-2210? I was able to do that for Federal tax, but saw an underpayment penalty for MA even I have a refund.

[jim1720]

The form M-2210 was automatically created but only equalize my income and tax withhold per quarter.  I'd like to enter actual income and tax withholdings. Thanks.

[AmyC]

Follow these steps:

1. Open your MA return
2. Go until your reached "you've finished your MA return"
3. Select Your Bottom Line to edit/update/revisit
4. Continue
5. Select yes or no
6. Select No to paying late
7. Underpayment Penalty, select Exceptions
8. Select None apply, continue
9. Enter 2022 liability or continue
10. Underpayment penalty, select yes
11. Enter the amounts from the beginning of the year to the date listed for each box. It is cumulative, not by quarter. This is why the final box is filled in for you.
12. Continue

[jim1720]

@AmyC Thank you very much for your reply. Your instruction is what I expected however I don't see the "Underpayment Penalty" section probably because I have a refund (since I made an estimated payment in December).

After I selected No to "Paying or Filing later", I got "Applying Refund to 2024 estimated tax" page, then I just got a summary of the bottom line, which listed both "underpayment penalty" and "overpayment" under the "other items".

What can I do to enter the "underpayment penalty" section? Thanks.

[AmyC · Accepted solution]

If you delete the estimated payment, then you should see the annualized income section. Once you get it properly filled out, go back and add the estimated payment you made. We are heading into unchartered territory but it makes sense that this should work.

[jim1720]

 @AmyC 

Thanks. That works.

I just found another issue with the federal tax underpayment penalty.  According to https://www.irs.gov/taxtopics/tc306, most taxpayers will avoid this penalty "if they paid withholding and estimated tax of at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller". However, even my 2023 return clearly indicated that the sum of my withholding and estimated tax exceeded 90% of may 2023 tax, Turbo tax still asked me to fill the form 2210 and pay the penalty. Even worse, I already e-filed the Federal return. What can I do to get my money back?

[AmyC]

The percentages you quote are for regular incomes. Higher incomes have higher withholding requirements so you must fall into that category. Otherwise, wait and see what the IRS does. They also review the return and the forms and make their own calculations. If they have not changed your return within 3 years or less, you can file an amended return to include the 2210. The instructions are on page 2 for the 2210 here.

From estimated payments:

Higher income taxpayers. 

If your adjusted gross income (AGI) for 2023 was more than $150,000 ($75,000 if your filing status for 2024 is married filing separately), substitute 110% for 100% in (2b) under General Rule, earlier. This rule doesn’t apply to farmers or fishermen.

General Rule In most cases, you must pay estimated tax for 2024 if both of the following apply. 

1. You expect to owe at least $1,000 in tax for 2024, after subtracting your withholding and refundable credits. 

2. You expect your withholding and refundable credits to be less than the smaller of: 

a. 90% of the tax to be shown on your 2024 tax return, or 

b. 100% of the tax shown on your 2023 tax return. Your 2023 tax return must cover all 12 months.

[fZiOuLgz]

@AmyC I spent over an hour on the phone with turbotax and they couldn't figure it out. I landed on your post by some miracle and it was the exact problem I had.

[robs462]

TT is not including MA form M-2210 with e-filing when penalty is $0, which is not always correct. The form may be needed in order to avoid penalties, such as due to uneven income throughout the year.  Apparently it’s been an issue for a few years.  How do we report to TT to get resolved?  There’s a separate communication chain on this subject, but no TT Expert/Champ has responded. Thanks.

https://ttlc.intuit.com/community/state-taxes/discussion/turbotax-fails-to-include-massachusetts-for...

[AnnetteB6]

The situation you described was submitted to the development team and is being addressed.  Use the link in the following TurboTax help article to register your email address to receive updates:

Why is my Massachusetts Form M2210 not included with my e-file when I am able to reduce my underpaym...
 

@robs462 

[robs462]

@AnnetteB6 

Thank you for your intervention.  This finally got the attention needed and I'm happy to report the issue has been resolved in the latest software update as of 3/20/2025.